Islamic finance grows more than 40 per cent a year, Bank Indonesia seminar told

Deputy Governor of Bank Indonesia, the country’s central bank, Halim Alamsyah, officially opened the second international seminar on Islamic finance, 7-8 May 2012, in Bandung.

The seminar was themed ‘Can Islamic Finance Focus on Productive Economic Activities to Promote Growth & Financial Stability’. President of the Islamic Development Bank (IDB) Group, HE Dr Ahmed Mohammed Ali was the keynote speaker.

The Deputy Governor forecast that Sharia-compliant banking could account for 15-20 per cent of Indonesia’s banking industry within 10 years, from just over four per cent currently. “We are confident Syariah (Sharia) finance will stimulate economic growth to a higher level and enhance the stability of the financial system,” he said at the opening of the Seminar in Bandung.

Indonesia’s Islamic finance assets were worth IDR 214 trillion ($23.2 billion), of which around 69.5 per cent are banking assets. Indonesia has 11 Sharia-compliant commercial banks, 24 Sharia bank business units and 155 Sharia-compliant rural banks (Bank Perkreditan Rakyat) with total assets of IDR 152.3 trillion (about US$16.5 billion).

Halim said Bank Indonesia is ‘very serious’ in its efforts to expand Islamic finance, especially banking, is confident that it could contribute greatly to economic growth, financial system stability and social well-being.

Islamic finance grows more than 40 per cent a year, Bank Indonesia seminar told


Issues discussed at the Seminar in Bandung included:

• enhancing the role of authorities in realizing the virtue of Islamic finance towards sustainable

economic development;

• revisiting current banking businesses and designing an enhanced banking model with optimal

support for the real sector;

• extending financial services to larger parts of society for more balanced and sustainable

economic growth;

• improving business values through Islamic finance (the preferred values and opportunities);

and challenges and opportunities in developing Sharia-compliant products to promote productive economic activity. Speakers and participants came from more than 11 countries including Turkey, UAE, Saudi Arabia, Bangladesh, Hong Kong, Bahrain, Thailand, Japan, Iran, Brunei, Malaysia, Singapore and Indonesia. The attendees include Board Member of the Central Bank of Turkey, Dr Lokman Gunduz; Head of BIS Asia Pacific, Dr Eli Remolona; Head of OREI, Asian Development Bank, Prof Dr. Iwan Jaya Aziz; the Governor of West Java, Dr (HC) Ahmad Heryawan; the Director General of the Indonesian Debt Management Office, Mr Rahmat Waluyanto; CEO of the
Mr Ijlal Alvi; Dr Milani Zivadjil from the International Monetary Fund; as well as Prof Dr Iraj Toutounchian from Iran, an expert on Islamic Economics and Finance.


Minister embraces much-needed sharia commodity trading

Trade minister Mari Elka Pangestu gave a warm welcome to the newly launched sharia-based commodity trading on Thursday, saying that such kinds of trading were needed to accommodate the growing sharia-banking sector.

“At the moment sharia-based commodity trading is much needed considering the fact that sharia banking is also growing and will need shariah-based products of which they can take advantage to manage liquidity,” Mari said, as quoted by

The sharia-commodity trading was established after cooperation by the National Syariah Board of the Indonesian Ulemas Council (MUI) and the Jakarta Futures Exchange (JFX), as well as support from Bank Indonesia and the Commodity Futures Trading Supervisory Board.

Mari said that Indonesia must take maximum advantage of the country’s sharia market to help it become a more competitive international player.

“Indonesia, as the country with potentially the biggest sharia market in the world and with one of the world’s largest supply of commodities, must make use of its superiority to raise competition in the global stage,” she said.

IDB to postpone selling Muamalat shares

JAKARTA: The Islamic Development Bank (IDB) officially submitted a letter to Bank Indonesia (BI) last week stating that it would postpone selling its shares of PT Bank Muamalat Tbk, a central bank official says.

BI Islamic Banking Directorate director Mulya E. Siregar said Friday that the postponement was due to a disagreement between IDB and potential investors over the stock price.

“No one has declared their interest in buying Bank Muamalat stocks, most likely because the IDB and the potential buyers have not agreed on the price yet,” Mulya said as quoted by

The three majority Bank Muamalat shareholders, namely Boubyan Bank Kuwait, Saudi Arabian Atwill Holdings Limited and IDB, have reportedly planned to sell their shares in Bank Muamalat. Continue reading